#### LAURA HETTIE CONNOR v. GRAND UNITED ORDER OF ODD FELLOWS ET AL.

(Filed 28 April, 1920.)

Insurance, Life — Fraternal Orders — Payment of Dues — Principal and Agent.

A member of a fraternal order had a credit in its local lodge for sick benefits, more than sufficient to pay his dues to its district lodge for a certificate of insurance issued only by the latter lodge, and while the local lodge was not the agent for the district organization for the collection of dues, its secretary and treasurer was its duly authorized agent for that purpose. The policy of insurance in the district lodge matured upon the death of its member, and payment thereof was refused to the beneficiary upon the ground that the member was not in good standing therein for failure to pay his dues, though more than sufficient money was in the hands of the secretary and treasurer of the local lodge to have paid them when due. Helé, by the operation of law, the moneys in the hand of the secretary and treasurer of the local lodge were applicable to the dues owing by the member to the district lodge, eo mstcmti it came into his hands, as the authorized agent of the district lodge for their collection, irrespective of his omission to forward them, and the policy was not void for the non-payment of the dues.

Appeal by plaintiff from Shaw, J., at November Term, 1919, of MeceleNbueg.

Tbis is an action in forma pauperis, by an aged colored woman, widow of John Connor, deceased, wbo was for many years a member of a colored organization, commonly styled tbe Odd Fellows.' Tbe case was referred to W. M. Smith, referee, and on exceptions to bis report it was reviewed by tbe judge, wbo modified tbe facts found, and entered judgment tbereon against tbe plaintiff, wbo appealed.

E. R. Preston for plaintiff.

Edgar W. Pharr and Thaddeus A. Adams for defendant.

Clark, C. J.

There were two actions,, one against the District Grand Lodge, which is sued for recovery on the insurance certificate, and the *495other against the local lodge to recover sick and funeral expenses. For convenience and by. agreement of counsel the two cases were referred and beard as one before the referee, but on the exceptions to bis report the-case was beard by the judge only as to the exceptions in the action against the District Grand Lodge, and the cause was continued as to the local lodge without prejudice in any way by the decision in this case.

In this appeal the court finds as facts that John Connor was a member of the Eising Star Lodge of Charlotte, and held the policy of insurance for $200 in the District Grand Lodge payable to bis wife, the plaintiff. John Connor obtained credit from the local lodge (on account of sick benefits due him) for bis dues as a member of said local lodge, and also for bis premiums to be remitted on bis insurance certificate for the months of April, May, June, July, August, September, October, and November, 1916, which credits were entered upon the record of the local lodge. These credits the local lodge afterwards claimed were obtained by John Connor by fraud or imposition, and voted John Connor “un-financial,” which means “not in good standing,” but the court finds that the credits were not obtained by fraud.

The court further finds as facts that under the rules of the local lodge a member could not become “unfinancial” in the local lodge until he was six months in arrears in bis dues, nor while sick, it being the custom of said local lodge to retain out of sick benefits the monthly dues to said lodge, and to the District Grand Lodge, and to turn the dues to the latter over to one Lem Eussell, secretary, whose duty it became to forward the same to the District Grand Lodge; that Lem Eussell was the permanent secretary of the local lodge, and by virtue of bis office was subendowment secretary of the District Grand Lodge, and as such officer received the monthly dues due the local and District Grand Lodge, amounting to 50 cents per month, and entered them in bis book provided for that purpose.

Tbe judge further found that John Connor paid no dues and obtained no credit for dues as a member of the local lodge after November, 1916, but was taken sick within 6 months from that date, i. e., in February, 1917, and remained sick until be died, 24 June, 1917; that after John Connor was taken sick in February, 1917, be was informed by Lem Eussell that be was financial; that the local lodge advanced or paid for John Connor bis insurance premiums, to the District Grand Lodge for the months of December, 3916, and January, February, and March, 1917, but did not advance or pay for John Connor any premiums on bis insurance certificate to the District Grand Lodge for April, May, or June, 1917, and that be knew that the local lodge did not advance or pay for him bis insurance premiums for said months, and that be neither paid nor made any effort to pay them himself; the' local lodge *496was not the agent of the District Grand Lodge, and the local lodge alone could determine wbether it should maintain a sick or funeral benefit feature; tbat the insurance premiums due by John Connor to the Grand Lodge were a level monthly rate of 25 cents per month, and a failure to pay any month’s premiums during the current month ipso facto lapsed the insurance certificate of any member making such failure; tbat John Connor was in good financial standing in the local lodge, and entitled to sick benefits as a member thereof when be was taken sick, and be could not become unfinancial therein as to sick benefits or other rights during bis illness, and be was in good standing in the local lodge at the time of bis death; tbat no notice was given by the secretary, Russell, to John Connor tbat be was nonfinancial, but as to the insurance certificate the court held tbat no notice was required; tbat for April and May, 1917, the local lodge in its monthly reports to the Grand Lodge included Jobn Connor as a member, but did not show tbat be bad paid the 25 cents per month insurance premiums, and the court held tbat bis insurance certificate in the Grand Lodge became lapsed by bis failure to pay the level monthly premiums for April, May, and June, 1917.

The court held tbat the local lodge was not the agent of the District Grand Lodge; tbat the insurance certificate of Jobn Connor bad lapsed and become null and void for more than two months prior to bis death on 24 June, 1917, and tbat the District Grand Lodge is not liable to any sum to the beneficiary on account thereof, and rendered judgment accordingly.

The District Grand Lodge issued the certificates of insurance and the local lodge, if it saw fit, could establish, as this lodge did, a provision for sick benefits. The court finds as a fact tbat the local lodge was not the agent of the District Grand Lodge, but it also finds tbat the secretary of the local lodge, Lem Russell, was also ex officio the agent of the Grand Lodge to transmit to it the premiums due by the members upon the certificates of insurance. Though it is found as a fact tbat Jobn Connor at the time of bis death bad failed for more than two months to pay bis premiums on bis insurance certificate, said Lem Russell bad in bis bands $36 “sick benefit dues” belonging to Jobn Connor. It would seem clear tbat whenever the premiums to the District Grand Lodge by Jobn Con-nor became due tbat so much of the fund belonging to said Connor in the bands of Lem Russell, by the operation of law would eo instanti be held by him for said District Grand Lodge, and should have been taken out of said $36 in bis bands, and have been transmitted by him on the premiums due to the District Grand Lodge. Bragaw v. Supreme Lodge, 128 N. C., 354, and citations thereto in Anno Ed.

Tbe case turns upon this proposition of law, and we think, therefore, tbat Jobn Connor having $36 to bis credit in tbe bands of Lem Russell, *497tbe agent of tbe District Grand Lodge, tbat tbe S0-cent premiums due tbe District Grand Lodge were in its possession, being in tbe bands of its agent, and if they were not actually forwarded, it was tbe fault of Lem Russell, tbe agent of tbe District Grand Lodge, and Jobn Connor’s interest in tbe insurance certificate was not lapsed and forfeited, and benee tbe plaintiff is entitled to recover, as beneficiary in tbe insurance certificate beld by Jobn Connor, tbe $200 from tbe District Grand Lodge, and tbe judgment below is

Reversed.